when we get a report, we assume you meant what you write, and you wrote that the store would not be in direct competition with other stores and other parts of the city. you did not mean that statement in your report? that was not meant to reflect what the planning department believes? >> we cannot make a blanket statement one way or the other. we do not have the information or the data. the planning department has the ability to evaluate one particular business's impact on the whole.

>> this should be stricken. is that when you are saying? >> the line should be stricken. >> is there any other line you did not mean to include? >> i do not recall anything. >> maybe you can go through and let us know if there is anything else that should not be unfair. -- should not be in there. >> what is before us is one additional pet food express. if we were to reject this and allow it to go forward, what if two more came before us. is there any point the planning department would have a concern that it would be predatory, or is that not how the department

looks at these things? i came in when we had the appeal on toyota and starbucks thinking i was going to go in one direction, and when i heard the testimony of the neighborhood, i could not support for melo retail, so what is more interesting is to understand -- support formula retail, so what is more important is to understand, if you want to come up with another one, you need to go to the southeast part of the city. is there any guidance we are going to get, or are we honor anna -- on our own for this one?

>> i think the issue is the basis by which we do our analysis. the reason most are in conditional uses is we look at them on a case by case basis. we look at the immediate area, and that is a comfortable walking distance to reagan where is it there might be competition -- that is a comfortable distance. where is it there might be competition? i do not think we would be equipped to answer the question, because five involves much higher analysis we would not be able to conduct, so when

we come to make our recommendations, we are making them in the context. >> part of the advocacy is it is an old school side. it has not been utilized for several years, and it has tons of parking. you are offering people parking, which is a premium. you are applying a mom and pop standards, and it is not an easy

sight to fill, so i feel like you are having in both ways. >> my only response would be to analyze what the impacts of small1 business has on the city as of hall, i would argue no one can do it at five level. -- as such a level. youit is a very complicated and difficult analysis i would argue very few people could do.

>> you have a real niche market, which is high and pet food. richard hig -- high end have food. when levi strauss approached me about coming in to the castro, one thing we did is sold jeans in the neighborhood, and we were able to establish only two businesses were going head-to- head. that was the bases that relieves the tension and let other competing retailers feel they have a place to go. these retailers are saying, we cannot carry it, and it does

seem like it is having a bigger impact. those are relative terms you should be thinking about. >> is there any response? >> one response is it is extremely difficult to cap the number or type of businesses that can come in. downtown has no formula control. that is why we've seen in -- why you see this. a dea-- they did not ban it out

right. they said, please evaluate on a case by case basis. it did not say we are only going to allow one pet food store. there's no cap on the number of pet food shops during gun -- us pet food shops. if the food express did come for a third or fourth or fifth location, we would look headwear it is located -- look at where it is located and if it is appropriate. we said it is not necessary. it is a case by case basis.

>> it seems you have a narrow definition of area and you are looking at. there is no similar formula of retail. that determines the outcome of the analysis. you could have a number of formula of retail establishments outside the quarter mile. it would not lead to the conclusion that it would have a negative impact on the businesses.

that is the danger to the approach. that is problematic. >> you could argue that you are going to be limiting businesses'. it is going to capture a much larger amount. we use a quarter mile because it as a comfortable walking distance. if you use a mile radius, it is down on the other side. while there may be businesses in that mile, i would be hard- pressed to say someone would walk all the way to presidio and

california to buy a large bed of cat food. we can argue both sides of that point. >> i do not know if that is the right approach. if it is in a quarter mile, then i think it opens the door to a number of possibilities that may undermine the language. i think the analysis is too narrow. people have other forms of transportation, and the impact can remain. that is the concern i have with the narrow approach you are

taking. >> just to read off the comments, i agree that the methodology needs updating, that this helps the planning department realize that being able to evaluate the level of competition between chain store formula of retail and existing small business needs to be upgraded, and in my district, we have a ban on pet shops. i have also reverse some bans

that have occurred. there were once too many restaurants. now they are insufficient. this is something that requires seasonable monitoring so we are able to support small businesses. ending the quarter mile radius comes close to the -- i think a quarter mile radius comes close to the district. the applicant has great charity, but as it relates to planning, i think this brings to light that we need something

different. >> thank you. a number of people testified there are also fears of fed co coming in -- pet co coming in. i no pet food express is a locally-grown chain, but it is still the eighth largest in the u.s. could you give us an awareness of the other at food stores coming our way as well? >> there are no others pending right now all. the director is unfamiliar with them as well. there are other businesses, but not for pet food. >> somebody said there may be a

pet smart coming on van ness at some point. that worries me whether there is a need for so many formula of retail stores, and i do see it as not equal with other pet food stores, whether there are a quarter of a mile, mile and a half, and i do see significant opposition from the people who love written to us -- who have written to us, and is it compatible? i think we're going to hear from the product sponsors, but there are so many questions about methodology, that i do not see it as sufficient. i would like to see a larger

radius when we are dealing with unique stores. even smaller places like about 2 miles away, but i would like to see idifferent methodology. >> the quarter mile radius is only one thing to look at. we looked at a quarter mile radius but also looked at the adjacent village. this is just one criteria we looked at. that is not the only factor. i wanted to clarify. supervisor chu: i know you indicated this is the site

currently vacated. i just wonder if there were other projects that had been proposed for the site. >> this is not a difficult fight. this particular shopping mall has been difficult for the owner thule's, -- for the honor to lease. region owner t -- the owner to lease. >> how long has it been vacant? >> about a year. supervisor elsbernd: the predecessor, was it a formula of retail? >> it was. >> how large a space?

>> 5500. >> it is already a formula of retail spot in that location. supervisor dufty: it was a video store, so it was priced out of the market by technology changing. it was something that changes. for me the question is about the variety of smaller merchants. >> market forces forced them to leave. market forces. president chiu: supervisor mirkarimi. supervisor mirkarimi: and to add to that reality is the fact that

we have, because of the economy, large sizable vacant stores throughout the city and county of san francisco so the automatic theory will be no small business is going to be able to occupy those spaces so let's just go ahead and assume that we're lucky enough to have a chain store formula retail to come in and do so for us or else that building will remain vacant. there is literally no strategy citywide or even within our districts that is helping answer this question. i can tell you, with the termination of redevelopment's jurisdiction in the fillmore and western addition which has been completely inundated with formula retail, once those businesses go belly-up, because of the cheer size of those, you would only obligate us to return to the formula retail and keep that domino effect going

forward. that's what's pertinent to the discussion before us is a requirement that we have a more modernized assessment on how to deal with these issues because case by case they'll continue to come before us and we're not, i think, answering the problem that is before us. president chiu: colleagues, any additional discussion? at this time, i'd like to ask the project sponsor if you could step up for your presentation. you have up to 10 minutes for your presentation to be divided with whoever you wish. >> my name is sean moore, i'm counsel for pet food express and i'm going to introduce its founder to you shortly but i wanted to try to frame a couple of issues, because we're sensing some of the frustration that we've been feeling for a while. because we're not quite sure what the policy, the deciding policy issue on this formula

retail. is it a question of what the neighborhood wants? and if it's that, then the neighborhood is pretty clearly spoken and you'll hear more about that and, after outreach we've done, it's pretty clear the neighborhood does want us. is the question, are we going to add something to this neighborhood? as you've heard from staff, this place has been vacant for a long period of time. you'll hear lots of comment about the issues that have gone on because of the vacancy with vagrancy and what have you. it has been a formula retail in the past and this is a fairly steep block, it's not a nice little walking area like sacramento street might be. is the issue about money coming or staying in the city? i'm glad to report that my law office's main office is in san francisco. george, who is the leading -- one of the leading vocal ponents to this sent out an email that you may have seen that says, our new shipping and billing address is our address in berkeley.

so apparently, their money is going outside the city. to stay with george for a moment. when the planning commission scrutinized george, the owner was quite clear to say, one, we're an international tourist destination, and two, our customers are loyal, they're not going anywhere else. so it's hard for george to say they're hurt when at the same time they say our customers will stay with us. so then the question we've been hearing from some of you over this is, what about the competitive impacts? and is formula retail about having no competition or not? and i was struggling with this so i tried to think, i canvass today a colleague of mine who used to work for one of the city's former antitrust lawyers, grandfather of one of your members, joe aiollo, and he said competition is not bad, what's bad is bad competition.

if you have someone that is predatory, if pet food express3 had tricked cat nip and boons out of the space they wanted on california street, that would be one thing. if pet food express was selling below cost to put competitors out of business, that would be a bad thing. if pet food express was deliberately going to customers and vendors of their competitors and trying to lure them away, that might be bad competition. but you haven't seen any evidence that, you haven't heard any evidence on that, and you can't, because we don't compete on price. we don't know what the overall competitive impact is. we know that one of our competitors wrote you a letter. his name is bobby lernered. he owns a place near glen park called critter fritters. he's been a competitor of pet food express for 25 years. he says, look, the competition for this pet specialty food is

grocery stores. the small boutique stores in san francisco, myself included, benefit from pet food express because their advertising calls attention to the fact that there's higher end, better quality food that's available. they take customers away from the grocery stores. so within those confines, if they're using their market par to shift people away from the grocery store competition, it can benefit the small boutique industrials who are also trying to find that niche. but the point is, no one knows for sure whether pet food express will impact a store on geary street or, you know, on sacramento street. it takes a lot of money do that kind of economic analysis and we haven't done that. i'd like to introduce someone whom i don't think the formula retail contemplates, the bank of

america, the gap. michael levy founded this company in san francisco, he gives back to this community. he knows how to run a small business and runs 34 small businesses. we give back to the community and he can speak to that better than i. >> good afternoon, supervisors, thank you for your time. my name is michael levy and i am the founder and co-owner of pet food express. we are not a publicly traded company and we do not have investors. i opened my first small pet supply store on westportal avenue back in 1980. since then, we've stride to provide customers with quality products and great customer service. we chose not to sell pets but put our efforts into promoting the adoption of homeless pets and helping every rescue and shelter throughout the bay area. we work very hard to-ing be good neighbors and fit well into our

communities. during the process of planning commission approval for a proposed new store, we reached out to the neighborhood. michael williams spent two months talking to neighbors about the process and obtaining signatures from the business owners themselves. through the outreach, we received overwhelming support from the individual merchants in the commercial district of the of the 93 merchants polled, 74 supported us opening up the spot, three were opposed and 16 did not voice an opinion. the report, i believe, is in the packet. in addition, we received letters of support from both of the merchant associations in rncd, the sacramento merchants. we also received the support of the greater geary merchants and property association, university avenue, and pets unlimited. copies of these are in the packet. there are no pet stores in and around cd. the stores who oppose us are from outside the neighborhood. they have stated if we are aloud

to open on california street, 24 pet scores will be impacted. the locations they listed were within two miles of the proposed store but six of the 24 are veterinarians, pet hospitals or groomers, all of which we don't compete with and seven of the rest are walgreens or safe way but most importantly they've never given factual history that we've caused another business to fold. george, a well merchandised pet boutique, is our closest distant neighbor. the owner, mr. weiss is, one of the key organizers you've heard from. he opened his first pet boutique in berkeley over 10 years ago. i opened my store about seven years ago and it was only six miles from his store. not only have both our stores co-existed for seven years but i understand that the success of george's shop in berkeley helped

mr. weiss open his store in 2008. there are currently two pet stores in san francisco. our market street opened almost four years ago and there has been no 39 in the number of pet-related businesses around us. our jones store opened six years ago and at that time there were three other pet stores within two miles. six years later, those stores are still in business, all three, and there are three additional pet stores that have opened. according to the pet industry, grocery stores and mass merchants such as costco and trader joe's account for approximately 25% of all the pet food sold in the country. they're our real competition. fortunately, the pet industry grows every year. in 1994, it did $19 billion and this year is projected to top $47. given the fact that there are more pets in san francisco and

more being adopted daily on a regular basis, there is room for more good pet supply stores in an ever-expanding marketplace. this year, our two san francisco stores will generate about $722,000 in sales tax and over $25,000 in other fees to the city. if we're able to open a new store on california street, it should add another $300,000 and about an additional $8,000 in fees. our proposed store will initially create 10 to 12 new jobs which should increase to about 15 new jobs within the first two years. we currently employ 35 san francisco residents. in a 2010 survey by the bay area newspaper group, pet food express was rated number seven out of the 15 top medium bay area workplaces. i opened my first pet supply store in san francisco over 30 years ago. please allow us to open this new store, one which willt